HIGH COUNTRY NEWS - 7/23/2012 Utah Tar Sands

Jul 23, 2012

By Jeremy Miller

In a small alcove at the foot of eastern Utah's Tavaputs Plateau is an old inscription left by French-Canadian mountain man Antoine Robidoux, one of the region's earliest entrepreneurs. Chiseled into cream-colored sandstone, it reads:

A few years earlier, Robidoux had established Fort Uncompahgre near present-day Delta, Colo., then built a second maison traitte (or "house of trade") 100 miles north in the Uintah Basin, bookending access to the abundant beaver, deer, elk and bear of the Uinta Mountains and Book Cliffs. But Robidoux's venture was short-lived. In 1844, the Utes burned both his outposts -- because he was a huckster and dealer of Indian slaves, the story goes -- and Robidoux passed into the fog of Western history.

This part of Utah, one of the most remote reaches of the Lower 48, has a long history of attempted exploitation of its natural riches. Today, companies are eyeing another potential source of wealth, this one underground. One small Canadian company believes it holds the key to developing the sizeable deposits of bitumen, or tar sands, that are splattered across the eastern and central part of the state like mud on a pickup's front fender.

More than a thousand miles north, in Alberta, over the last decade, tar-sands mining has become a major industry; Canada has overtaken Saudi Arabia as the United States' largest oil supplier. In the process, tens of thousands of acres of boreal forest have been erased by vast strip mines and iridescent tailings lakes. Meanwhile, Utah's bitumen deposits, the largest in the U.S. -- said to hold between 12 and 30 billion barrels of recoverable oil -- have remained virtually untouched.

Along the Uintah Basin's natural outcrops, such as "Asphalt Ridge," thin black jags of bitumen cut through lighter-colored sandstone. For decades, Utah's road department used the petroleum-bearing crud to pave its highways, but few oil companies considered it a viable hydrocarbon source. Then, oil prices surpassed $100 a barrel, and "energy independence" and "job creation" became twin mantras among domestic energy boosters. Calgary-based U.S. Oil Sands has now embarked on the first commercial attempt to exploit Utah's tar sands. Its PR Spring project atop the Tavaputs uses a supposedly "eco-friendly" solvent to coax oil from the state's notoriously stubborn sands.

As Canada's booming industry has shown, turning bitumen to oil requires lots of water and is highly polluting. Extracting and refining one barrel of crude from Canadian bitumen requires between two and five barrels of water. It also produces an even larger volume of toxic wastewater and as much as four times the greenhouse gas emissions of conventional oil. Utah's bitumen is interspersed with larger deposits of oil shale, an energy source that has long cast a pall over the region, because of its massive energy and water requirements. So far, no company has ever extracted it profitably; 30 years ago, for example, ExxonMobil's Colony oil shale project in western Colorado dramatically went bust, swallowing 2,000 jobs.

To make matters dicier, the bulk of Utah's fossil fuels are found on federal lands -- and the BLM is considering a move to severely restrict tar sands and oil shale development. It's reviewing a Bush-era plan to open 2.3 million acres in Utah, Colorado and Wyoming to tar sand and oil shale development, and may scale it back to slightly less than 500,000 acres.

So just how quickly and how massively might Utah's tar sands industry grow? And at what environmental cost? The U.S. Oil Sands project offers a glimpse. PR Spring could become just another scar on the land, a blip in a long history of economic and technological failure. Or it could revolutionize tar sands mining in the state -- as boosters such as Gov. Gary Herbert predict -- catalyzing Utah's unconventional oil industry and transforming this lonely region into a high-desert Alberta.

A good place to consider that possibility is atop the Tavaputs. The 200-acre PR Spring project site is nestled within a 32,000-acre lease administered through the Utah Trust Lands Administration. Several experimental unconventional oil projects are happening on nearby trust land, including a test of an oil shale extraction method headed by Red Leaf Resources. In this incubatory environment, the U.S. Oil Sands project, which got under way in 2005 when the company was still called Earth Energy Resources, has received little interference from state regulators.

U.S. Oil Sands CEO Cameron Todd says that the PR Spring project is now ready to move from experimental to commercial phase. (His confidence may partly derive from his extensive access to state officials, including Gov. Herbert, who last November led a "trade mission" to an oil conference in Calgary headed by Todd himself.) The company reportedly raised $11 million in a May stock offering, which it will use to fund expanded strip mining and processing that will generate as much as 2,000 barrels of crude oil per day.

It takes a ton-and-a-half of sand -- roughly the volume held in the scoop of a small front-end loader -- to supply raw material for just one of those 2,000 barrels. Heavy machinery would scour bitumen from the pit around the clock. Most veins lie under 20 to 25 feet of overburden, says Todd, though the deepest this company will mine are 150 feet down. The sand and mineral fines remaining after the oil has been removed will be combined, shoved back into the pit and covered with topsoil. But processing expands such wastes by as much as 30 percent. The overflow will be dumped into surrounding ravines -- a method starkly reminiscent of Appalachia's mountaintop coal mining. And the project will create miles of light pollution, illuminating one of the country's last great "dark" regions.

As in Robidoux's time, the vast Tavaputs is still prized by hunters -- deer, elk and black bear roam the undulating plateau. But increased traffic from energy development could fragment their habitat, as well as that of several threatened species, including the greater sage grouse and Mexican spotted owl. The PR Spring site is also home to a rare flower, the purple and flame-orange Graham's beardtongue, which grows almost exclusively on the oil shale and tar sands barrens of the Green River Formation. The remote depths of Desolation Canyon on the Green River and West Canyon on the Colorado, both fed by the plateau's streams, hold three endangered species of fish -- the bonytail chub, humpback chub, and Colorado squawfish -- all of which are highly susceptible to changes in water conditions.

Getting bitumen out of the ground in a way that does not threaten wildlife is merely the first part of the challenge. In Utah's tar sands, the oil molecules stick to the surrounding rock like barnacles and won't yield without an agent to first dissolve the bond. U.S. Oil Sands' breakthrough is a compound derived from orange peels called d-Limonene, or citrus oil, which "unsticks" the tar. While the compound is found in numerous consumer products -- hand soaps and nutritional supplements, for example -- and has been used successfully in oil spill cleanups, it has never been applied to commercial oil production.

In order to utilize the solvent, the sands must first be sent through a series of on-site crushers. Hot water is added to the resulting slurry, generating a "froth" of oil, solvent and fine sand particles. This mixture is then passed through a series of separation towers, where the crude oil is isolated. It's then trucked to refineries in Salt Lake City for processing. Unlike conventional light crude oil, the heavy crude generated from PR Spring -- like Canada's -- requires extra, energy-intensive refining steps to remove impurities, such as sulfur and heavy metals, before it can be turned into anything useful.

Because most of the water used in processing is recovered, Todd says the company can manage by tapping groundwater under the site -- some 126,000 gallons per day -- eliminating the need to truck in water or pipe it to the plateau, but potentially threatening the region's many seeps and springs, including PR Spring itself. As of May, however, only one of several wells drilled by the company had yielded water -- not enough to supply the required one-and-a-half barrels of water per barrel of oil.

In addition to requiring less water, the solvent process, according to the company, eliminates the need for wastewater ponds. The high rate of recovery during separation coupled with rapid evaporation leaves the waste rock "clean as beach sand," says Todd. (He acknowledges that some solvent would remain in the waste material, but insists that what is left over is too dilute to pose any threat.)

But critics believe more than a trace amount of residual d-Limonene and hydrocarbons will inevitably remain in the "clean" sand. According to the Energy Department, most commercial bitumen processes are capable of removing around 90 percent of the oil -- leaving one barrel of oil in the sand for every nine extracted. Moreover, says Bill Johnson, a professor of civil and environmental engineering at the University of Utah, whose testimony was central to a recent legal challenge to the project, d-Limonene does not merely unstick the tar but also releases polycyclic aromatic hydrocarbons, or "PAHs" -- a class of volatile and carcinogenic compounds -- and makes them highly mobile in water. When rain or snowmelt permeates the piles, chemicals can be transported into streams or aquifers. "Any d-Limonene that ends up in the water will bring tar with it," says Johnson.

The groundwater battle began in 2009, after the company filed its notice of intent to proceed with a large mine. John Weisheit, director of the Moab environmental group Living Rivers, and Rob Dubuc, an attorney with Boulder-based Western Resource Advocates, challenged the Division of Water Quality's determination that the mine posed a negligible threat. "The groundwater on the site is very deep and the company's water recovery techniques were deemed to be best practices," says Rob Herbert, manager of the groundwater protection section of the Division of Water Quality. The groups argued, however, that U.S. Oil Sands failed to conduct adequate studies on how the citrus solvent might cause PAHs to leach offsite. (At a May hearing over the state's preliminary approval of the project's groundwater discharge permit, Vice President Barclay Cuthbert said his company conducted these tests but withheld the results, citing trade secrets.)

Last year, Utah's rules for groundwater discharge permitting became more rigorous, and Dubuc argues that the company should be held to the new standards. "We're not asking for the mine permit to be denied," says Dubuc. "We're saying that the agency can't make an informed decision without all the information … and they won't have it until they require the company to go through the full permitting process." The mine is now on hold, awaiting a decision after the hearing. (Red Leaf Resources' oil shale project is also on hold after Living Rivers and Western Resource Advocates successfully appealed the company's groundwater permit in June.)

Last November, as winter settled in, I visited the site with John Weisheit. Heading north from Moab in his pickup, we wound through the red sandstone gorge of the Colorado River, past the hardscrabble town of Cisco. This former railroad stop has sought salvation in fossil fuels over the last decade, to little apparent avail. Most of its wood-frame buildings appeared at some advanced stage of reabsorption into the arid plain. On the outskirts, amid ashen hills of Mancos shale strewn with sections of rusting oil pipe, we came upon a sign that read HYDROCARBON HEAVEN.

The Tavaputs Plateau loomed ahead. Weisheit told me about the geology of Desolation and Cataract Canyons, the years he spent as a river guide, and his improbable late emergence as a local environmental leader. Last year, he took activist Tim DeChristopher through Cataract Canyon before DeChristopher began serving a two-year sentence for disrupting a 2008 federal oil lease auction.

We reached the Tavaputs and entered a canyon cut by Westwater Creek, stopping briefly to examine the Robidoux inscription, on a bullet-riddled panel covered with ancient red pictographs. Climbing, we emerged onto the Tavaputs, which is dotted with sage, scrub oak and gnarled juniper. Thick stands of Douglas fir and aspen grow in the ravines. Low, billowy clouds hung in the Colorado River gorge, 30 miles away. Because of the difficult access, I had expected an untrammeled preserve, but this section of the plateau has already been visibly scarred: From the main road, spurs run out in all directions to gas pipelines and compressor stations. Weisheit steered gingerly around a bend. Across a steep gully, another tar sands mine -- abandoned in the 1980s -- looked like a black bruise on the snowy hillside.

Eventually, we arrived at the PR Spring pit. A biting wind swirled over small icy pools. A 20-foot-high mound of snow-covered topsoil sat beside the mine, the limbs of shrubs and entire trees poking out. Below, a wide access road corkscrewed into the ravine. Tracks of heavy equipment pockmarked the mud around the depression, like animal prints around a desert watering hole.

As Weisheit and some other environmentalists see it, the struggle at PR Spring involves much more than this one mine alone -- it's a first critical push in the effort to exploit the region's unconventional oil. According to the U.S. Geological Survey, there may be as much as 800 billion recoverable barrels of oil -- three Saudi Arabias'-worth -- locked up across the Green River Formation. A Bush-era Energy Department document on "strategic" unconventional fuels states that, nationwide, "government action and incentives could catalyze a 350,000 barrel per day (tar sands) industry by 2035." (Most known deposits are in Utah, with much smaller amounts in Texas, California and a few other states.)

In spite of technical and bureaucratic difficulties, the possibility of a big payoff has lured a host of companies, from large national firms to small startups. MCW Energy Group (another Canadian company) has snapped up tar sands leases nearby, looking to test its own "proprietary" solvent. Oil shale, too, has lured new players including Estonian oil shale giant Eesti Energia. Last year, the state-owned firm acquired three parcels comprising 30,000 acres on the Tavaputs' northeastern fringe. One contains the state's largest oil shale mine, abandoned back in the 1980s by a now defunct energy company.

Even those who have asserted a new dawn for unconventional energy acknowledge the huge energy and infrastructure costs involved. According to the RAND Corporation's Jim Bartis, who analyzes unconventional fuels, "The Utah (bitumen) resources are overall of lower quality in seam thickness and yield per ton as compared to the Canadian resources. So in the absence of government subsidy, I would be surprised to find investors interested in U.S. sands so long as investment opportunities are available in Alberta."

Milind Deo, director of the University of Utah's Heavy Oil Program, echoes Bartis, stating that even with a major technological breakthrough, it is unlikely that Utah's bitumen deposits will be exploited rapidly. "It took 40 years to get to the level of production we see in Alberta today," he says. "There are no guarantees in Utah that it will ever approach that level."

But if it does, local conservationists will be ready. "If this thing takes off," says Weisheit, "you can bet we'll be chaining ourselves to bulldozers."